Financial Literacy: A Mandatory Requirement for Running a Successful Small Business

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Money management is difficult. For small businesses, especially minority-owned ones, developing strong financial literacy skills is critical to their success. Fortunately, there are many useful resources available

Lyndsae’ Peele, the founder of Kingdom Vision Consulting, notes that small business owners know how to do their job or service, but that’s only one aspect of running a business. An owner’s business acumen is also essential to ensure the profitability of the business.

Peele is a results-oriented financial coach and black wealth advocate. Her banking experience and her passion for economic development led her to create an educational radio program and a strategic consulting firm. Kingdom Vision has been honored as the 2022 Maryland Financial Services Champion of the Year by the Small Business Administration.

“A lot of small businesses are solopreneurs. We are the chief officers of everything,” she said. “We are in charge of marketing, technology, operations and finance, literally all of that. small businesses leave their babies in the hands of others who want to come and support them, however, if you don’t know what it takes to run and grow a business, you won’t be able to do it successfully.

Learning small business financial literacy is still important and now, more than ever, due to supply chain issues, inflation, and the ongoing fallout from the COVID-19 pandemic. “Now is the time for us to start rebuilding brick by brick, and a big part of that rebuilding is making sure we’re harnessing the financial literacy of small businesses,” Peele said.

This information can help develop an effective strategic plan. “Many business owners these days can only really think about next week or next month or maybe 12 months from now, but once you’ve learned some financial knowledge and understood how money works and how to leverage available resources, you can plan for long-term growth,” she said.

For example, if a business wants to add a new location and hire more employees, the information available as part of a comprehensive financial literacy program would ensure that the owner is able to create sales projections and forecast flows. potential cash flow. This information would become especially valuable if there was an income gap and the homeowner needed to apply for a line of credit.

Peele notes that one of the biggest obstacles she encounters when teaming up with clients is their mindset. “Most of them are used to surviving just because they’re used to surviving in their personal finances, and they have that mindset with work,” she said. “It starts from within. It’s really an internal battle to overcome and to understand that you are worthy of financial success and that you know that you are capable of managing, growing and maintaining your business, and that you understand that you have what it takes. to create wealth.

There are options available to give entrepreneurs access to essential organizational and financial services from local chambers of commerce, including the Maryland Black Chamber of Commerce created to provide networking opportunities, affinity groups, resources and partnerships that offer training, workshops, coaching and funding. assistance.

The Maryland Hispanic Chamber of Commerce is another resource that serves the Hispanic business community by promoting business opportunities, workforce development, resources, and building connections through outreach and mentorship.

The nonprofit Greater Baltimore Urban League has launched the Raymond V. Haysbert Sr. Center for Community Entrepreneurship Development, which provides capital to small business owners who may not be able to obtain funds through traditional lending sources. He also helps with business coaching, planning and projections, operational advice and other support services.

There are also government-sponsored programs to help individuals learn to become business owners, including those that target specific sectors, such as veterans.

“There are so many local programs, but if we don’t take advantage of them, the programs won’t be able to continue to get the funding they need to provide those resources,” Peele said.

Financial institutions are also a great resource for learning more about business acumen. Peele notes that people typically have transactional relationships with their banks or credit unions, only using them for basic checking, savings accounts, and deposits and withdrawals, which doesn’t help develop a relationship. financial balance.

“It costs you nothing to walk into a bank and talk to a banker, but often we are scared,” she said. There are a lot of trust issues between minority communities and financial institutions. However, they have what we need.

“Understanding financial literacy and its impact on your business, whether it’s being able to pay your employees, opening a new location, or hiring a new employee in the next six months, is really helpful,” Peele said. “You understand how to use the resources around you, but if you don’t know they exist or how they work, you won’t know how to use them to grow and scale your business.”

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This article is featured in the 2022 edition of The Daily Record’s Expanding Opportunities Resource Guide for Small, Minority and Women Businesses which was published September 23. diversity, entrepreneurship, and innovation in Maryland’s small business community. Learn more about Expanding Opportunities or read the digital edition.

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